Saturday 21 May 2022
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India pressures Switzerland to reveal names of black money depositors

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The Government of India has been telling the Opposition in the country that it has been trying to bring home black money stashed away in tax havens located overseas. In support of that claim, a letter from Finance Minister P Chidambaram has been made public that shows the country has strongly objected to Switzerland’s refusal to share details pertaining to the HSBC bank accounts of certain Indians in the European country.

This is Chidambaram’s third letter to his Swiss counterpart. In it, he has warned that an effective exchange of tax-related information was “extremely important” for economic cooperation between the two countries. India alleges “incriminating evidence of tax evasion” against holders of these accounts. New Delhi is seeking information about accounts mentioned in the list that India received from France through a bilateral treaty.

Switzerland had communicated its decision against sharing the information through a letter dated April 7 to Chidambaram. The Indian finance minister says this is not in accordance with the international standard of bilateral relations. Under global pressure, Switzerland has agreed to ease its banking secrecy laws in recent years. It signed a revised tax treaty with India in 2011 to facilitate greater flow of information about alleged black money. However, it has refused to share information with India about the accounts mentioned in the so-called HSBC list that India received from France through a bilateral treaty. France reportedly received that list after was stolen by a peeved HSBC employee in 2011. Swiss laws do not permit exchange of information in cases where some criminality may be involved in obtaining data.

Interestingy, some of the countries that managed to get information about their tax evaders had actually bribed bankers in the tax havens, who leaked the data. This cannot perhaps be attempted by the Government of India as theethical question involved would embroil the act in a controversy.

A questionable claim made by the Government of India is some confidentiality clause in the Double Taxation Avoidance Agreement/Convention (DTAA or DTAC) that it has with certain countries from where it seeks to retrieve Indian money. The Opposition and street activists are not convinced any such clause exists; they feel the government is not coming up with the names because its functionaries figure among the list of offenders. New Delhi has called on Bern to honour its “ and duties” agreed to in the DTAC between India and Switzerland.

Chidambaram’s letter to Swiss Finance Minister Eveline Widmer Schlumpf says that India’s request “is based on obtained legally under a DTAC with a third country and India is not party to commission of any criminal offence in Switzerland in this regard.”

The Supreme Court of India had reconstituted a Special Investigation Team (SIT) set up to monitor the government’s probe into a black money case involving 26 individuals on 1 May. India suffered black money outflows of an estimated $84.93bn (£50.34bn, €61.28bn) in 2011, according to a December 2013 report by Washington-based Global Financial Integrity (GFI). Crime, corruption and tax evasion drained $946.7bn from the developing world in 2011, an over 13.7% increase from 2010, the GFI report had added.

Ever since, many economists have questione the figure. Some have even tried to reduce yoga trainer-cum-activist Baba into a laughing stock for claiming that Indian black money stashed abroad could be as high.

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